BUS203 QUIZ3 (Best results ever! ;))

Q As part of the move towards greater transparency about remuneration, Guideline 9.2 of the 2012 Singapore Code on Corporate Governance (2012 Code) encourages companies to fully disclose the remuneration of each individual director and the CEO on a named basis, to the nearest thousand dollars. In comparison, the 2005 Singapore Code on Corporate Governance only required disclosures within bands of S$250,000. Which of the following guideline(s) in the 2012 Code also support this principle of greater transparency towards remuneration?
I.    Companies should disclose in aggregate the total remuneration paid to the top 5 key management personnel (who are not directors or the CEO).
II.   Companies should prepare an annual remuneration report, as part of the annual directors' report.
III.  Companies should disclose more information on the link between remuneration paid to the executive directors and key management personnel, and their performance.
A I, II and III

Q In Singapore, the legal framework supports the market-based model of corporate governance because ____________.
A the Companies Act provides that the board of directors is responsible for the company

Q Under the 2012 Singapore Code on Corporate Governance, in which of the following scenarios should a lead independent director be appointed?
I.  The Chairman of the Board and the Chief Executive Officer is the same person.
II. The Chairman of the Board and the CEO are immediate family members.
III. The Chairman of the Board is part of the management team.
IV. The Chairman of the Board is not an independent director.
A I, II, III and IV

Q Given the agency problem, one of the biggest challenges would be to ensure ____________.
A goal congruence.

Q Examine the Singapore Code on Corporate Governance 2012 (CCG 2012) and identify an additional responsibility for the Board of Directors.
A Consideration of sustainability issues such as environmental factors, as part of the board of directors' development of strategy for the company

Q Which of the following is not a rationale for requiring independent directors on the board of directors of a listed company?
A To ensure that the minimum number of directors exceeds five directors.

Q In principle, for improved corporate governance, the Chairman and the Chief Executive Officer (CEO) should be separate persons. Which of the following best describes the rationale for this?
A It allows for an appropriate balance of power and greater ability for independent decision-making by the Board of Directors of a company.

Q The oversight of corporate governance of listed companies is now under ______________.
I.   Monetary Authority of Singapore
II.  Accounting & Corporate Regulatory Authority
III. Singapore Exchange
IV. Inland Revenue Authority of Singapore
A I and III

Q Which of the following best describes Guideline 5.3 of the 2012 Singapore Code on Corporate Governance?
A Directors should be assessed on an individual basis to determine whether he/she has contributed effectively and demonstrated commitment to his/her role as a director.

Q To improve corporate governance, companies are encouraged to establish a whistle-blowing process under the 2012 Singapore Code on Corporate Governance. Demonstrate your understanding on whistle-blowing process by choosing a statement that best describes the concept of whistle-blowing.
A The disclosure by a person, usually an employee, to the public or to those in authority, of mismanagement, corruption, illegality, or some other wrongdoing within his/her organization.

Q The first Code on Corporate Governance was issued in Singapore in _________.
A 2001

Q Which of the following best describes the concept of goal congruence?
A The alignment of the longer term interests of shareholders and the shorter term interests of the managers of a company

Q Which of the following principles are set out in the Principles of Corporate Governance issued by OECD (Organisation for Economic Cooperation and Development)?
I.    Rights of shareholders
II.   Key ownership functions
III.  Equitable treatment of shareholders
IV.  Responsibilities of the directors
A I, II, III and IV

Q Pursuant to Guideline 4.1 of the 2012 Singapore Code on Corporate Governance, which one of the following is not the role of the Nominating Committee?
A Develop a plan for the recruitment and training of employees.

Q Guideline 6.5 is a new guideline that provides the directors with greater support for making informed decisions. Develop an accurate description of this Guideline. Which of the following is an accurate description of this Guideline?
A The Board of Directors should have a procedure for directors to obtain independent professional advice at the company's expense, for the purposes of carrying out their directors' duties

Q Which of the following is/are models of corporate governance?
I.    Market-based model
II.   Relationship-based model
III.  Family mercantilism model
IV.  Private entrepreneurial model
A I, II and III

Q There are new requirements for directors to keep updated on trends and information in the 2012 Singapore Code on Corporate Governance. Which of the following best describes Guideline 12.8?
A The Board should disclose in the company's Annual Report the steps taken by the AC members to keep abreast of changes to accounting standards and issues which have a direct impact on financial statements

Q Based on Principle 13 of the 2012 Singapore Code on Corporate Governance, reporting lines of the company's Internal Auditor should be such that the primary line of reporting is to _____________.
A the Chairman of the Audit Committee of the company.

Q Which of the following best describes the relationship-based model of corporate governance?
A A model that focuses on the company as a productive entity in which the interest of various stakeholders, including the public, are vested.

Q The 2012 Singapore Code on Corporate Governance stresses the importance of communications with shareholders. Which of the following illustrates this concept?
A The Board of Directors should take steps to establish and maintain regular dialogue with shareholders so as to gather their views or inputs and to address their concerns.

RESULTS: 100/100

ECO203 Quiz3

Q A fixed exchange rate system is alleged to:
A be efficient

Q Which of the following would not be advised for a nation that has experienced difficulty in controlling inflation?
A Contractionary monetary policy.

Q Advocates of fixed exchange rates claim that flexible exchange rates:
A are inflationary

Q The equilibrium level of national income in an open economy is given by:
A I + (X-M) = S

Q What is the correct order of events following an expansionary monetary policy with a flexible exchange rate?
A Interest rate falls, investment and income rise, current account worsens

Q An alleged advantage of flexible over fixed exchange rates is:
A market efficiency

Q When demand is unitary elastic, a change in price will leave expenditures on the commodity___________.
A unchanged

Q To correct a recession and a balance of payments surplus a nation requires:
A expansionary fiscal and monetary policy and either a revaluation or a devaluation

Q Discuss which of the following are international economic problems facing the world today.
A All of the listed choices

Q Under a managed floating exchange rate system, the nation's monetary authorities are entrusted with the responsibility of intervening in foreign exchange markets to smooth out ______ without attempting to affect their ______.
A short run fluctuations in exchange rate, long run trend

Q The equilibrium level of national income in the economy is where _______________.
A leakages = injections

Q A country with budget deficit which is also at full employment can improve its deficit situation by allowing its currency to depreciate, only if,
A the real domestic absorption is reduced

Q To avoid or minimize international financial crises in the future, the IMF is taking which of the following measures?
A Strengthening emerging markets' banking and financial systems

Q If ηM = -0.85 and ηX = -0.62 , then
A Foreign exchange market is stable

Q The system under which the exchange rate is always determined by the forces of demand and supply without any government intervention in foreign exchange markets is a(n):
A freely floating exchange rate system

Q Which of the following is concerned with equilibrating a nation's balance of payments?
A External balance

Q Which of the following is an example of a contractionary monetary policy?
A Decrease in the nation's money supply

Q The system under which exchange rates or par values are periodically changed to correct balance-of-payments disequilibria is known as a(n):
A adjustable peg system

Q To correct a recession and a balance of payments deficit a nation usually requires:
A expansionary fiscal and monetary policies and a devaluation

Q The price elasticity of the ______________ in euros is given by the percentage change in the quantity demanded of US exports by foreigners divided by the percentage change in the price of US exports in euros.
A foreign demand for US exports

RESULTS: 75/100

ECO203 Quiz2

Q Which of the following is true about PPP theory?
A The theory explains that the change in the exchange rate between two currencies is proportional to the change in the ratio in the two countries' general price levels

Q A nation's currency will appreciate if the nation's economy experiences which of the following?
A Economic growth

Q Trade cannot be an engine of growth for today's developing nations because:
A all of the listed choices

Q The foreign exchange market is:
A the framework for the exchange of one national currency for another

Q Which are is not an advantage of export-oriented industrialization?
A domestic industries grow accustomed to protection and have an incentive to become more efficient

Q Suppose that apples from Japan face a 15% tariff in Germany and a 20% tariff in Italy, while Germany and Italy maintain free trade between each other. Germany and Italy are therefore part of a(n):
A Free trade area

Q For most developing countries:
A agricultural goods and raw material tend to make up much of domestic output.

Q Compare the different types of economic integration, which of the following represents the loosest form of economic integration?
A Preferential trade arrangement

Q With free trade, the supply curve faced by a small importing country will be:
A upward sloping

Q A dynamic welfare gain resulting from the formation of a customs union would be:
A trade creation

Q Assume in base year 1990, the index for the volume of exports is equal to 100, and we find that, for the 2004 fiscal year, the US price index for exports has fallen 6 percent, the price index for imports has risen by 9 percent, and the index for the volume of exports is 108 for 2004. What is the value of the U.S. income terms of trade?
A The income terms of trade is I = [P(X)/P(M)]Q(X). Thus, after the change, the new scaled ratio is [94/109]108 = 93.1

Q Immizerising growth refers to a:
A a decrease in the welfare of a nation with growth

Q ____________ are balance of payments transactions involving payments to foreigners.
A Debit transactions

Q Which of the following is an example of a capital inflow for the US?
A A domestic increase of assets held by foreign investors

Q Which of the following is not included in the current account?
A Currently produced goods and services

Q If the sport rate for Euro is $1.32/€ and the 90 day forward rate is $1.44/€ then the forward rate carries how much forward premium or discount?
A Formula: [(Forward rate - spot rate)/spot rate] x (360/number of days in the contract) x 100
(1.44-1.32)/1.32X(360/90)X100
36.36% premium

Q A nation's currency will depreciate if the nation itself experiences which of the following?
A Economic growth

Q If Nation B is the source of all of Nation A's imports, then a customs union between Nations A and B will:
A Be trade creating.

Q An exchange rate is defined as:
A the domestic currency price of the foreign currency

Q Trade creation will ________________ for the domestic country.
A increase welfare

RESULTS: 75%

BUS203 Quiz2

Q Which of the following describe(s) the effect of a winding-up order? 
I.    All legal proceedings against the company may be stayed or halted.
II.   The court has the power to approve a list of contributories who are required to contribute assets to the company in the event of a winding-up.
III.  The directors cease to have the power of managing the company.
IV.  All contracts of employment between the company and its employees are halted.

A I, II, III and IV

Q A public debenture such as a bond involves ____________.

I.   a debt which has been offered for public purchase 
II. debentures which may be sold at a discount by the issuing company
III. interest that is payable by the issuing company, based on the face value of the debenture
IV. a redemption by the issuing company on the maturity date of the debenture

A I, II, III and IV

Q For take-overs relating to a public listed company on the Singapore Exchange, which of the following statutory and/or non-statutory rules would apply?

I.    Companies Act of Singapore
II.   The Singapore Code on Take-overs and Mergers
III.  The Singapore Exchange's Listing Manuals
IV.  The Securities and Futures Act of Singapore

A I and IV

Q Analyse the usual difference between equity financing and debt financing.

A In equity financing, a company would usually not have to make any repayments. In debt financing, a company would usually have to make repayments of principal, together with interest.

Q Generally, a prospectus must disclose all the information which ____________.

A investors and their professional advisers would reasonably require to make an informed assessment of an investment.

Q In the case of a winding-up by the court, the liquidator must _________ .

A apply to the court for an order of dissolution. Upon the grant of the order, the company is dissolved.

Q Which of the following best describes a floating charge?

I.   A security interest granted over a company's specific assets. The company can no longer sell those assets.
II.  A security interest granted over a company's assets generally. The company is able to use and sell those assets.
III. Upon the occurrence of certain specified events, the floating charge will crystallize and becomes fixed over specific assets.

A II and III

Q Which of the following best describes a scheme of arrangement?

A A company enters into an arrangement with its creditors to compromise its liabilities towards the creditors, with the approval of the court.

Q During the period of judicial management, there is a period of _________.

A court-ordered moratorium which prevents the creditors from taking legal action against the company.

Q Under the Companies Act of Singapore, fixed charges over certain assets must be registered. What is a consequence of failing to register such charges with the Accounting and Corporate Regulatory Authority of Singapore?

A If the charge is not registered, the lender cannot enforce his security against the liquidator or any other creditor of the company. The debt becomes unsecured.

Q There are two types of winding-up: _________ and _________.

A voluntary winding-up; winding-up by the court

Q In voluntary winding-up, _________ .

A the members of the company voluntarily decide to liquidate the company.

Q Which of the following is a criterion for a liquidator of a company, regardless of whether the liquidator is appointed by the court or by the members of the company?

A An approved company auditor who has been approved to act as a company liquidator

Q Which of the following best describes voluntary arrangement?

A An alternative to bankruptcy whereby the insolvent person is permitted to enter into voluntary arrangements with his creditors on rescheduling his payment of debts, wholly or partially.

Q A company which is already listed on the Singapore Exchange can raise fresh capital by ____________.

I.   issuing new shares via an initial public offering. 
II.  issuing additional shares through a placement 
III. issuing additional shares via a rights issue.

A II and III

Q If, despite undergoing a scheme of arrangement, receivership or judicial management, a company fails to overcome its insolvency, then it is likely that

A winding-up will follow and the company will be dissolved.

Q Which the following is/are power(s) of the liquidator?

I.   Bring or defend any legal proceedings against the company.
II.  Make compromises with any class of creditors.
III. Sell the assets of the company via public auction, public tender or private contract.
IV.  Appoint an agent to act on his behalf.

A I, II, III and IV

Q Under the Securities and Futures Act of Singapore, there are some exemptions when a prospectus is not required to be issued when the company is making an offer of securities. Which of the following illustrates such exemptions? 

I.    A private placement of securities to less than 50 persons within a 12-month period.
II.  Offers of securities where the total amount raised by the company is less than S$5 million over a 12-month period.
III. Offers of securities to "accredited investors", i.e, investors with a net worth of at least S$10 million.
IV.  An offer of securities made in connection with a take-over scheme.

A I, II, III and IV

Q What is a key objective of the regulatory framework relating to the capital market in Singapore?

A To maintain a capital market that is free from insider trading, deceptive behavior and market manipulation.

RESULTS: 95/100